The primary consumer of the natural food color marketplace is the food and beverage industry, which utilizes the products to enhance the appearance of processed and fresh foods. Natural colors such as Rosmarinus Officinalis, Calendula Officinalis, and Curcuminoids derived from vegetable and flower sources are widely used in varied applications including cosmetics, drugs, mouthwash, and toothpaste. Colors are the major factor for the purchase of food. The business leaders are focusing on delivering colorful food products that stand out on the shelf and are deemed Instagramable. For millennials and Gen Z consumers, Instagramability of food is an apparent trend that is poised to surge further in the near future. Vibrant colors produced through natural sources are gaining prominence in the marketplace, which is pressurizing the enterprises to deliver them to meet the expectations of the consumers, while at the same time, maintain a clean label. Most of the consumers believe that food and beverage products are healthier only with recognizable ingredients. The food and beverage industry has entered a new phase of clean label 2.0, which makes the enterprises to use natural food color to stand out in the competition. In November 2018, Petco Animal Supplies Inc., an American pet retailer in the United States, decided to stop using artificial food colors and flavors for cats and dogs by May 2019. The company is the first retailer to take a stand for the growing issue related to using artificial colors in pet food. They are planning to use natural food color for food and adopt the clean label trend to attract more customers. Petco is the first company to start such an initiative which will eventually encourage similar companies to use natural food color and adopt clean label strategy. Similar initiatives by the business leaders are expected to impact the demand in the near future positively.
As of 2018, the global natural food color market size was evaluated to be $1.7 billion. During the forecast period 2019-2025, the revenue opportunities are poised to increase at a CAGR of 6.8%. The report covers Natural Food Colors Market size by type and applications, Natural Food Colors Market share by top 5 companies and also the market share by start-ups during the forecast period.
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Increasing Government Support to Promote Natural Food Color
Artificial food colors are a root cause for many health-related issues such as cancer and allergies, especially in children. Cancer is considered as an important issue arising due to artificial food colors such as synthetic dyes and Red 3. According to the Change.Org 2018 report, about 200,000 pounds of Red 3 is being used in food is the common reason for cancer among people. Owing to an increase in thyroid cancer due to red three dye, the U.S. Food and Drug Administrative is planning to ban the product, which will boost the natural food color market revenue. FDA now assures the safe and appropriate use of color additives and promotes using natural food color in food products.
Furthermore, with the growing concerns related to health and the petitions being filed for using natural food colors, the government of many countries has imposed stringent rules and regulations to utilize clean-label and eco-friendly colors in the food product. The EU Specialty Food Ingredients, International Association of Color Manufacturers (IACM), and Natural Food Colors Association (NATCOL) have also taken initiatives to promote the manufacturers to use natural food color rather than artificial dyes. As the manufacturers are implementing the use of natural color for food in their food production, it is augmenting the growth of the natural food color market.
North America Natural Food Colors Market Dominating the Global Demand, Producing 37% Revenue Share in 2018
The rapid expansion of the F&B industry in North America is becoming an essential factor for the growth of the natural food color market players. This is attributed to the surging demand for natural food colors in the region. In North America, more than three-fourths new F&B products are introduced using vibrant natural colors from different sources. The people are visually thrilled to eat the food in the region. Recently, many companies have started to adopt natural dyes for their meat and poultry and bakery products. Companies such as Kraft Mac & Cheese and M&M have already done this, due to growing concerns related to food made up of recognized ingredients. Consumers’ preference towards consuming natural food color coupled with the clean label in North America is fueling up the growth of the natural food color market.
Emerging Natural Food Color Trends
RTD Beverages Sparkling in 2019
In 2019, the fusion of fruits in the beverages made by using natural food color is carving a niche in the market. It provides all good nutrition of fruits, all-natural ingredients along with low-sugar content. The manufacturers of these products are adopting high-performing, cloudy, and vivid natural colors to make the juices look bold. In Europe, companies are using class one caramel color by burning sugar and adding artificial color additives.
Moreover, the beverage segment of the natural food color market is growing rapidly. With an introduction of several new beverages being launched every year, the beverage segment is incrementing at a CAGR of 5.1% through to 2025.
Annatto Color Becomes Useful for Beverages
The annatto coloring agent is commonly used for adding color to cheese, margarine, butter, and custard powder. Annatto was not a useful condiment for beverages earlier. However, the annatto solution has now become a stabilized ingredient for giving natural color to the products. This being used to give a rich red-orange color in any acidic beverages. The annatto coloring agent is also used in the formulation of the face and neck products, shampoos, lipsticks, and skincare products in the cosmetic and personal care industry. Utilization of such natural dyes is propelling the natural food color market to grow.
Social Media Creating Buzz for Colorful Dairy Products
In the visual-centric world, color is equally important as flavors. Social media has created and influenced the manufacturers and chefs around the world to use natural food color. For instance, Starbucks, in July 2019, launched Frappuccino. Tie-Dye Frappuccino is the latest series of Instagramable beverage being rated on top. This is an emerging inspired by retro fashion trend in the beverage sector using natural color extracted from vegetables and fruits to add richness to the drink.
The Major Player of Natural Food Color Market
Some of the major companies dominating the natural food color market are Sensient Technologies, Döhler Group, Chr. Hansen Holding A/S, Archer Daniels Midland Company, Kalsec Products, Koninklijke DSM N.V., Naturex, and DowDuPont. These companies have been incessantly concentrating on R&D investments, strategies, acquisitions, joint ventures, innovation, and partnership strategies to strengthen their portfolio of products.
In October 2018, the Archer Daniels Midland Company (ADM), a natural food processing and commodities trading company, announced that the company had adopted certain strategies to improve the customer relationship. ADM has invested in next-generation technologies and modern organizational units. The company also declared that it had increased the production capacity of natural food color in Germany to meet the surging demand from the consumers.
In September 2018, Naturex, a leading player and a French supplier of natural ingredients, was acquired by Givaudan, a Swiss manufacturer of fragrance and active cosmetics. The objective behind this acquisition is to leverage Naturex product portfolio of plant extracts and natural ingredients across the food and beverage industry and bolster the natural food color market revenue.
In April 2018, Chr. Hansen Holding A/S, a leading bioscience company, acquired the Banker Wire’s manufacturing unit in the U.S. Chr. Hansen is planning to make this facility it is new headquarter for its natural food color production in North America. Headquarter will have application and quality assurance labs, a pilot plant, R&D facilities, production, warehouse, business support functions, and the sales and marketing department.
In February 2018, Sensient Technologies, a global manufacturer and marketer of colors, signed a definitive agreement to acquire GlobeNatural’s natural color business, a natural food and ingredients company are forming a new entity that will operate under the Sensient Natural Color Peru S.A.C name. This acquisition is projected to support the company to grow in the natural food color market. The new entity will work towards expanding and innovating the company’s natural color supply chain portfolio.
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